GFX Morning Commentary, March 30th, 2012

Good Morning,

Today's expected range for the Canadian Dollar against the US Dollar is .9920-1.0020

Today's expected range for the Canadian Dollar against the Euro is 1.3270-1.3400

Today's expected range for the Canadian Dollar against Sterling is 1.5940-1.6075

The US Dollar is marginally weaker this morning as the EU Finance Ministers begin their 2-day meeting with the expectation of greatly increasing the provisions on the EU Bailout fund, anything less than 800 Billion Euro will be considered a disappointment and will be met with Euro selling.  EURO.USD which had traded as low as 1.3225 overnight rebounded this morning and traded as high as 1.3345.

The Canadian Dollar has once again rejected the parity level for the time being and USD.CAD has moved a bit lower, with North American equity markets looking for strong gains this morning I would expect the first move for USD.CAD will be to test the .9950 level. The Loonie continues to trade in tight ranges against its US counterpart and should do so for some time.

For today we do have some secondary US data and the Canadian GDP data for January were we are expecting a monthly growth rate of 1.7% (on an annualized basis) but overall I think the expected jump in the equity markets will push USD.CAD a bit lower and this data will be ignored by the currency markets.

The markets have pretty much ignored the Canadian budget as it contained very few surprises, I thought I would provide a couple personal observations on the budget, with cuts and attrition coming for some 19k public sector employees and with the pay freezes in the public sector in Ontario I look for massive labour conflicts in the coming year which I think can be disruptive to the overall economy. I will watch with interest what the inflationary pressures of the removal of the penny will be to the economy and what it will mean for Government tax revenue. Everything you buy will be forced up by a minimum of $0.05c, imagine the increased Government revenue just on gasoline sales alone!! While I agree the penny has to go, make no mistake it will cost us that little bit more and increase Government revenue significantly.

Have a great weekend

Mike

GFX Morning Currency Rates
Friday, March 30th, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9964			1.0002
CAD/USD		1.0036			0.9998
EUR/USD		1.334			1.328
EUR/CAD		1.3294			1.3286
STG/CAD		1.5953			1.588
AUD/CAD		1.0363			1.0347
CAD/JPY		82.34			82.23
CAD/CHF		0.9057			0.9069
CAD/HKD		7.7906			7.7644
CAD/CNY		6.317			6.306
CAD/MXN		12.8179			12.8117
Commodities
Gold		$1,665			$1,656
OIL		$103.30			$104.87
Option Volatility
Canada
O/N		7.00%			11.15%
1 Week		8.80%			8.55%
1 Month		8.50%			8.62%

GFX Morning FX Commentary, March 29th, 2012

Good Morning,

Todays suggested range for the Canadian dollar against the US Dollar is .9950 – 1.0050.

Todays suggested range for the Canadian dollar against the Euro is 1.3275-1.3400

Todays suggested range for the Canadian dollar  against Sterling is 1.5770-1.5900

The US Dollar is stronger in overnight trading as EU leaders are set to announce an increase in the rescue fund to a USD equivalent of 1.3 Trillion, with a lot of this being set aside to assist Spain and Italy.

EURO.USD which had been trading at 1.3340 fell in the overnight session to trade at 1.3275 so the Euro is still being spooked by debt crisis events, not even than a stronger than expected German employment report could give the Euro a boost last night

With the resurgence of the Greenback over the last couple sessions USD.CAD has moved back towards par and just really continues to remain on the sidelines reacting to events outside the country. The volatility in the Loonie remains against both the Euro and Sterling’s as EURO.CAD and GBP.CAD continue to push higher.

We may get some enhanced volatility around the release of the US 4th quarter GDP report this morning and the release of the Canadian Federal Budget this afternoon. If the GDP report is better than expected then you will see equity markets jump and USD.CAD drop lower, just the opposite will occur if the number is less than expectation, USD.CAD will jump above par.

The financial markets will be watching the Fed's budget today to determine if their plan for reducing the deficit is credible, if markets don't think they are doing enough to slay the deficit then the Canadian Dollar will get hit and USD.CAD will move higher as a result, if it is perceived as a deficit fighting budget then the Loonie should get a small boost.

Have a great day

Mike

GFX Morning Currency Rates
Thursday March 29th, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		1.0002			0.9965
CAD/USD		0.9998			1.0035
EUR/USD		1.328			1.3348
EUR/CAD		1.3286			1.3302
STG/CAD		1.588			1.5859
AUD/CAD		1.0347			1.0375
CAD/JPY		82.23			83.26
CAD/CHF		0.9069			0.9063
CAD/HKD		7.7644			7.7902
CAD/CNY		6.306			6.3235
CAD/MXN		12.8117			12.8195
Commodities
Gold		$1,656			$1,676
OIL		$104.87			$106.30
Option Volatility
Canada
O/N		11.15%			11.12%
1 Week		8.55%			8.52%
1 Month		8.62%			8.60%

GFX Morning FX Commentary, March 28th, 2012

Good Morning,

Todays suggested range for the Canadian dollar against the US Dollar is .9900- 1.0000

Todays suggested range for the Canadian dollar against the Euro is 1.3270-1.3400

Todays suggested range for the Canadian dollar against Sterling is 1.5820-1.5920

The US Dollar is mixed this morning as the Euro is enjoying a bit of a resurgence on the back of official comments coming out of Europe. In Italy, Prime Minister Draghi made the statement that the debt crisis is "almost over" and there are also reports coming out that at an EU meeting later this week the rescue fund will be significantly increased to help contain any future problems, strange but I just can't convince myself that all is rosy in Europe at the moment, I must becoming a skeptic in my old age.

Sterling had a big drop overnight as the UK GDP came in much worse than expected, 4^th quarter GDP fell 0.3%, this is following a decline of 0.2% in the third quarter which indicates that the UK is in a recession. Things are not good over there so look for the Bank of England to consider adding more stimulus to the economy, Sterling should continue to trade with a weak bias for some time. GBP.CAD is also a bit lower as it tested 1.5900 yesterday and now looks set to test back at 1.5820.

The Canadian Dollar is marginally weaker to start the morning session in narrow overnight range trading against the US Dollar , without any clear direction the Loonie continues to trade back and forth against its US counterpart in very uninspired trading patterns.

For today we do get the release of some secondary US data but it should not have much of an impact, with US futures pointing to a higher opening this morning I would expected USD.CAD to drop back a bit towards .9950 to start the day. Tomorrow should be an interesting day as we get the release of the US GDP for the 4^th quarter of 2011, all financial markets will want confirmation that the US economy is starting to push forward.

Have a great day

Mike

GFX Morning Currency Rates
Wednesday March 28th, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9965			0.9918
CAD/USD		1.0035			1.0085
EUR/USD		1.3348			1.3355
EUR/CAD		1.3302			1.3245
STG/CAD		1.5859			1.583
AUD/CAD		1.0375			1.0438
CAD/JPY		83.26			83.48
CAD/CHF		0.9063			0.9099
CAD/HKD		7.7902			7.8284
CAD/CNY		6.3235			6.3556
CAD/MXN		12.8195			12.743
Commodities
Gold		$1,676			$1,692
OIL		$106.30			$107.26
Option Volatility
Canada
O/N		11.12%			10.73%
1 Week		8.52%			8.27%
1 Month		8.60%			8.61%

GFX Morning Commentary, March 27th, 2012

Good Morning,

Today’s expected range for the Canadian Dollar against the US Dollar is .9870-.9970

Today’s expected range for the Canadian Dollar against the Euro is 1.3220-1.3320

Today’s expected range for the Canadian Dollar against Sterling is 1.5810-1.5925

The US Dollar was marginally weaker early in the overnight session but it is now off its weakest levels against the Euro this morning and appears that it wants to get stronger this morning. Yesterday Fed Chairman Ben Bernanke made the statement that it will be difficult for the US economy to maintain the current level of job growth, a statement that global investors think may be hinting at another round of stimulus for the US economy, if this is the case and the Fed does another round of stimulus then look for equity markets to bounce higher and the Greenback to weaken off.

The Canadian Dollar had a quiet overnight session as it settles in above the .9900 level, a strong rally yesterday brought on by the higher equity markets resulting from the Bernanke comments pushed USD.CAD lower throughout the afternoon. The Canadian Dollar continues to trade back and forth without any real sense of direction and is just responding to developments in the equity market around the world.

Up today we get the US Consumer Confidence report which is expected to show that consumers are still upbeat about the recovery, if the number comes in as expected it should allow equity markets to have another positive day and USD.CAD should test the .9900 level at some point, if the number comes in weaker than expected then equity markets will fall off and USD.CAD will jump back towards the .9950 level.

Have a great day

Mike

GFX Morning Currency Rates
Tuesday March 27th, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9918			0.9969
CAD/USD		1.0085			1.0031
EUR/USD		1.3355			1.3271
EUR/CAD		1.3245			1.32
STG/CAD		1.583			1.5875
AUD/CAD		1.0438			1.0442
CAD/JPY		83.48			82.98
CAD/CHF		0.9099			0.9128
CAD/HKD		7.8284			7.797
CAD/CNY		6.3556			6.3304
CAD/MXN		12.743
Commodities
Gold		$1,692			$1,661
OIL		$107.26			$106.58
Option Volatility
Canada
O/N		10.73%			10.87%
1 Week		8.27%			8.39%
1 Month		8.61%			8.82%

GFX Morning FX Commentary, March 26th, 2012

Good Morning

Todays suggested range for the Canadian dollar against the US Dollar is .9925 – 1.0025

Todays suggested range for the Canadian dollar against the Euro is 1.3200-1.3300

Todays suggested range for the Canadian dollar against Sterling is 1.5810-1.5910

The US Dollar is unchanged to start the new trading week in overall quiet trading conditions. Initially currency traders sold the Euro on the expectation that the US economy will continue to rebound but earlier this morning positive economic news came out of Germany and that gave the Euro a bit of a bounce so overall the currency markets were fairly lackluster and start up in North America where we left them on Friday.

The Canadian Dollar is unchanged against its US counterpart from its close on Friday as it settles in to trade around par for the next little while. The Loonie is far more active against the Euro and Sterling as activity with those currencies push the Loonie around much more than against the Greenback.

With the lack of economic activity today I would expect another quiet day for USD.CAD but with equity markets pointing higher to start off we favour a test of .9975 at some point but for the most part the markets should trade in a tight range. As the week goes on the currency markets should pick up as we do get more US economic data which will hopefully further confirm that a strong recovery is underway in the US.

Have a great week

Mike

GFX Morning Currency Rates
Monday march 26th, 2012
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9969			1.0005
CAD/USD		1.0031			0.9995
EUR/USD		1.3271			1.3251
EUR/CAD		1.32			1.3262
STG/CAD		1.5875			1.5871
AUD/CAD		1.0442			1.0405
CAD/JPY		82.98			82.58
CAD/CHF		0.9128			0.9085
CAD/HKD		7.797			7.76
CAD/CNY		6.3304			6.2977
Commodities
Gold		$1,661			$1,649
OIL		$106.58			$105.76
Option Volatility
Canada
O/N		10.87%			7.41%
1 Week		8.39%			8.88%
1 Month		8.82%			8.75%